Page 456 – Show-Me Institute

School Choice Is Accountability

Posted on March 18, 2014May 5, 2026 by James V. Shuls

Last week, a group of education reformers issued a joint letter in which they argued that school choice is accountability. They wrote:

To some, accountability means government-imposed standards and testing, like the Common Core State Standards, which advocates believe will ensure that every child receives at least a minimally acceptable education. Although well-intentioned, their faith is misplaced and their prescription is inimical to the most promising development in American education: parental choice.

True accountability comes not from top-down regulations but from parents financially empowered to exit schools that fail to meet their child’s needs. Parental choice, coupled with freedom for educators, creates the incentives and opportunities that spur quality. The compelled conformity fostered by centralized standards and tests stifles the very diversity that gives consumer choice its value.

This is a point that I have made on the Show-Me Daily blog before. Several months ago I wrote:

Critics of school choice often lament that “private schools aren’t held accountable” because they don’t take state tests. What they don’t realize is that choice, not tests, are the best form of school accountability. State evaluation systems encourage schools to focus on the evaluation; choice encourages schools to focus on the student. Unfortunately, few families have school choice.

The beauty of school choice is that it allows parents to hold schools accountable to their vision of quality. This stands in stark contrast to state-based accountability, which imposes a standard vision of quality on everyone.

More Than 500 Economists Oppose Minimum Wage Hike

Posted on March 18, 2014May 5, 2026 by Rik W. Hafer

In an open letter released March 12, 2014, more than 500 economists voiced their agreement that increasing the federal minimum wage to $10.10 would not reduce poverty. The letter’s release coincided with hearings in the U.S. Senate’s Health, Education, Labor and Pensions (HELP) Committee to debate raising the federal minimum wage. The letter notes that poverty is a complex issue and simply raising the minimum wage is not “a silver bullet solution.” The letter’s signatories include Nobel laureates Eugene Fama, Edward Prescott, and Vernon Smith along with a number of previous administration officials, among them Glenn Hubbard, Greg Mankiw, and Harvey Rosen, all past chairs of the Council of Economic Advisors. (The full letter and list of signatories is available here.)

Raising the minimum wage costs jobs for the very workers it is supposed to help. A recent study by the Congressional Budget Office (CBO) found that the proposed increase would cost the economy 500,000 jobs by 2016. This outcome from raising the minimum wage agrees with previous work, including analysis that David Neumark and I wrote for the Show-Me Institute.

Missouri policymakers must consider the full impact of raising the minimum wage. It simply is not good public policy to raise wages for some individuals at the expense of other workers who are made even worse off than they are now. The minimum wage simply is not a viable policy tool to fight poverty.

Policy Breakfast: Government Privatization in Missouri: Successes, Risks, and Opportunities

Posted on March 17, 2014May 5, 2026 by David Stokes

Show-Me Institute Director of Local Government Policy David Stokes recently released a case study about privatization efforts in Missouri. The study documents the variety of ways in which counties, cities, and towns can engage the private sector to effectively provide many public services. Examples of areas that can experience cost savings and service improvements through privatization include trash pick-up, ambulance service, swimming pool and golf course management, animal control, fleet management, government pharmacy services, and much more.

Read the full case study: .

Conversations With Lee Presser: Education Policy

Posted on March 17, 2014May 5, 2026 by James V. Shuls

I recently joined Lee Presser on his show, Conversations With Lee Presser. We discussed a host of education issues, including: teacher tenure, teacher pay, Common Core, and school choice. You can watch the entire conversation below.

Bloodletting In Clayton

Posted on March 14, 2014May 5, 2026 by David Stokes

For centuries until approximately 200 years ago, bloodletting was a common treatment for illness. If you were sick, you would go get a nice bleeding. We finally learned what should have been obvious: with the exception of one or two illnesses, bleeding was a terrible idea that did more harm than good. The Missouri local tax equivalent to bloodletting is the economic development sales tax.

Government does a terrible job planning the economy, whether it is a Soviet five-year plan or retail TIFs (tax increment financing) in Saint Louis County. Municipal government can improve the local economy by doing the things it needs to do well: police, fire, local roads, etc. It does not need to “develop” our economy, especially because “economic development” in Missouri is synonymous with taxpayer subsidies and corporate welfare.

Clayton, the Saint Louis County seat and the region’s other downtown, is considering an economic development sales tax, along with three other tax increases, on the April ballot. Doing four tax increases at once (four!) is crazy, but the point of this post is just the economic development sales tax.

Clayton has been careful in its use of tax incentives and other economic development tools in comparison to other Saint Louis County municipalities, which admittedly is a very low bar. Clayton deserves credit for that. So I can’t understand why it would propose raising a tax to do more of something it should not do in the first place: government planning of the local economy.

Clayton officials likely would claim that the intention for the new tax funds is not more use of subsidies or more local planning, but a continued focus on business recruitment, retention, etc. I believe them, and in the short run, I am sure that would be true. But, in my opinion, the increased use of, and funding for, government economic development activities will almost certainly be followed by heavier use of various subsidies and tax incentives. Cities such as Clayton should be moving in the opposite direction with less or zero use of these types of programs, not increasing taxes to do things they should skip from the start.

More to come on these four tax increase proposals next week.

Mayor James’ Corporate Welfare Handouts

Posted on March 13, 2014May 5, 2026 by Patrick Tuohey

The Kansas City Star reported that Burns & McDonnell, the successful architectural and engineering firm headquartered in Kansas City, is considering the purchase of an available plot of land immediately adjacent to its main offices.

The company, which intends to request incentives for the project, plans to tear down the synagogue building and redevelop the property with a phased, 450,000-square-foot office development and 800-space garage.

No one can blame Burns & McDonnell for asking for taxpayer handouts such as tax abatements or Tax Increment Financing (TIF). After all, these businesses answer to their owners and/or shareholders who want to maximize profits. Companies almost always will ask, and they almost always will make the case that they need taxpayer subsidies. What is disappointing is that cities are so eager to give away the shop in these circumstances.

Kansas City is no exception when it comes to giving away unnecessary incentives just to be shortchanged on the back end. The same Star piece included this:

Kansas City Mayor Sly James described Burns & McDonnell as the “quintessential hometown entrepreneurial success story and a tremendous corporate citizen.”

“We welcome their expansion and the new jobs it will bring,” the mayor said in a statement.

City cooperation will be essential if the project is to move forward.

Essential? Really? That is doubtful.

Purchasing the land is likely very attractive to Burns & Mac, as it is known. The land is adjacent to office buildings it currently operates — so the company cannot credibly threaten to run to Kansas if it doesn’t get its way. Furthermore, Greg Graves, the chairman and CEO, has deep roots in Kansas City and has been active in local life — he isn’t moving to Kansas. Here is a perfect opportunity for Kansas City to hold its ground and hold on to taxpayer dollars.

When a city abates property taxes, it freezes the income of other jurisdictions such as the library and schools, which are funded through those taxes. Mayor James talks a lot about how he is concerned about education in Kansas City, but says his hands are tied. Yet here is an opportunity for him to support education funding and he seems to be ready to cave in before the company has even asked.

This should be no surprise. As the Star’s Yael Abouhalkah wrote in December:

Like most politicians, Kansas City Mayor Sly James has been willing to support corporate tax breaks that lower the tax rates for powerful companies but essentially increase the tax burden on others who can’t sweet-talk City Hall…

Indeed, as he and others know all too well, the city has passed numerous public subsidies in the past that have sucked money away from school districts, libraries, counties and other taxing jurisdictions.

Every business will claim poverty if they think they can benefit from it. It’s our hope that Mayor James and the city smarten up and stop making foolish deals that weaken the city’s — and others’ — funding base.

David Stokes On Farmland Tax Assessments

Posted on March 12, 2014May 5, 2026 by David Stokes

Missouri’s legislature has upheld a 5% increase in farmland productive value. That means that there will be a slight increase in property taxes on farmland next year. David Stokes advocates for this increase because of the disparity in property taxes across the state.

Where Are The Metro Buses We Paid For? (Part 2)

Posted on March 12, 2014May 5, 2026 by Joseph Miller

My last post about the Metro bus system in Saint Louis detailed how Metro’s focus on maintaining low-passenger bus routes reduces resources for popular routes. This post focuses on the actual purchase of buses. News stories about the overcrowding of the popular 70-Grand Ave. route wondered why Metro’s tax increases have not paid for new buses. As a Fox News affiliate put it, “after all, you paid for them.”

It turns out that Saint Louis residents do not, in fact, pay for new buses through local tax increases. When it comes to funding capital expenditures for transit, like new buses, the federal government provides most of the money. In a three-year period around the time of the most recent tax increase, the federal government paid approximately 77 percent of Metro’s capital expenditures, and even 10 percent of operating costs. After the last tax increase allowed Metro to continue service on some routes, Metro did buy 10 new buses. However, a federal grant paid for most of the buses.

If Metro wants new, larger buses for the 70-Grand route without making major changes to the system, the most obvious options are to receive a federal grant or raise taxes further.

This underlines the point that more than 90 percent of local taxes for Metro busses go to the operation of the system and not new vehicles. And unfortunately for Saint Louis area taxpayers, the cost of operating the Metro bus system continues to rise. Over the last 20 years, Metro’s bus fleet has been cut in half, ridership has fallen, and total passenger miles have decreased. However, the cost of operating the bus system has increased at an average of 4 percent per year. In fact, the annual operating cost per available Metro bus seat has risen from $2,869 per seat in 1991 to $9,360 per seat in 2012. This represents a 6 percent increase per year, much higher than inflation and even increases in fuel prices.

In the last decade, Metro has failed to control costs, despite significant federal aid in capital expenditures. Metro therefore required tax increases to maintain the underutilized routes that go to low-population density areas. These factors mean Metro requires higher taxes and more federal dollars to buy larger buses to increase service on the city’s busiest routes.

What Metro needs most of all is greater flexibility to address cost issues and still provide a base level of service to outer areas.

Hospital Price Transparency Bill A Bold And Necessary Reform

Posted on March 12, 2014May 5, 2026 by Patrick Ishmael

In the coming days, the Show-Me Institute will release a policy brief about what Missouri can do to improve access, cost, and quality of care for Medicaid patients. Authored by yours truly, the paper outlines five serious reform ideas, and one of those ideas focuses on price transparency from hospitals.

One of the biggest obstacles to greater competition and lower prices in the health care arena is the absence of readily accessible and easily comparable pricing information for common medical procedures. For as many things as the Affordable Care Act got wrong, it got right its requirements for greater price transparency. A review of the data last year by the U.S. Department of Health and Human Services hammers this point home.

For example, average inpatient charges for services a hospital may provide in connection with a joint replacement range from a low of $5,300 at a hospital in Ada, Okla., to a high of $223,000 at a hospital in Monterey Park, Calif.

Even within the same geographic area, hospital charges for similar services can vary significantly. For example, average inpatient hospital charges for services that may be provided to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colo., and from a low of $9,000 to a high of $51,000 in Jackson, Miss.

There are numerous reasons costs can vary wildly from hospital to hospital, and quality of care is almost certainly a component. But if you’re from California and could travel to Oklahoma instead to pay less than 3 percent of the cost of a joint replacement, wouldn’t you want to know that? If you could travel across town to another hospital to pay one-fifth the cost for a procedure, wouldn’t it be important to have that information? With few exceptions, state transparency requirements for hospital pricing are pretty awful nationwide, and consumers are hurt when that information is effectively withheld.

That is why I am very much a fan of Missouri Senate Bill 684, sponsored by Missouri Sen. Jason Holsman (D-Jackson County), which would help deliver precisely that sort of information. Coincidentally, the bill will be heard in a Senate committee later this week — right about the time we release my policy brief. I intend to submit testimony on the bill.

SB 684 would be a great stride forward for Missouri health care consumers. I hope Sen. Holsman’s colleagues take the proposal very seriously.

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